The Do’s & Don’ts of Business in China

Banking on China’s economic growth and increasing consumer appetite, many overseas entrepreneurs are looking to establish businesses in the mainland, but fund managers and startup executives agree that the market is becoming harder to crack.

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The ability to achieve a higher company valuation in Asia–in some cases 30% more than in a developed market after an initial public offering, according to Ernst & Young–is one of the key attractions for foreign startups setting up in the region, especially China. But, protecting intellectual property, establishing Chinese partnerships and adopting the right business strategy are some of the few obstacles that stand in the way.

“Companies need to avoid bringing Western business ideas straight into China. It’s not always transferable,” said Savio Kwan, who was previously the chief operating officer of one of China’s largest e-commerce companies, Alibaba Group, and is now a co-founder of A&K Consulting.

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